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Prime Minister Yulia Tymoshenko is intent on making good on the 36 campaign promises she made during last year’s elections. UNIAN Within weeks of returning as prime minister, Yulia Tymoshenko demonstrated her commitment to wide-ranging reforms and government re-prioritizing

government re-prioritizing.

Most significantly, she has fulfilled promises to trim lawmaker perks, doubled government financing for Ukraine’s cultural and arts institutions and promised an overhaul of the corruption-plagued energy sector.

“I counted how many promises we fulfilled from our ‘Ukrainian Breakthrough’ program through the formulated budget – 36,” Tymoshenko told a Dec. 27 live national television program.

“I think we will move forward in such a way because we simply have the inspiration,” she added.

The Tymoshenko government’s first success was passing a revised 2008 budget the night of Dec. 28, well ahead of the New Year’s Eve deadline.

The coalition mustered the votes of all its 227 deputies and eight Communists, who were threatened with expulsion by their party leaders after they voted with the Democratic Forces coalition.

The opposition Party of Regions of Ukraine (PRU), led by former Prime Minister Viktor Yanukovych, criticized the coalition of absentee voting and claimed only 197 deputies from the hairline majority were present for the vote.

Budget revenues totaled $42.6 billion, expenses amounted to $46 billion, leaving a deficit of $3.4 billion, about 2.1 percent of Gross Domestic Product (GDP).

The budget’s revisions, and Tymoshenko’s emphasis on certain priorities, revealed her seriousness in fulfilling not only the goals and campaign promises of her eponymous bloc, but also those of coalition partner, the pro-presidential Our Ukraine-People’s Self-Defense political bloc.

Eliminating prosecutorial immunity for parliamentarians was that bloc’s biggest promise which has yet to be fulfilled.

But in the same spirit, the budget did reduce perks for parliamentary deputies, cutting deputy pensions by half, eliminating free transportation and lodging in some exclusive health resorts and eliminating subsidies and compensation for Kyiv apartments.

Under her leadership, the government increased revenues by $11.5 billion from the 2007 budget, “because we know where all the shadow money is turning,” Tymoshenko said.

“All we needed was one or two days to close off what we know and we obtained $11.5 billion for the state budget,” she said.

“We allocated this money for roads, preparing for Euro 2012 [football championship], investment support for education and doubled costs for science and culture,” she added.

In fact, Tymoshenko announced during the Dec. 27 broadcast that her government uncovered the fate of the $4.8 billion earned from the public auction of flagship steel mill Kryvorizhstal, which was privatized in Ukraine’s most transparent showcase tender to world leader Mittal Steel back in 2005.

“It was practically arranged along certain niches within Treasury accounts,” she said.

“Large sums were preserved actually. A portion went to covering budget deficits of prior years, partiall to cover deficits in the pension fund, and we found what was left and set it aside for returning lost savings, Hr 6 billion ($1.2 billion),” she added

This, the second Tymoshenko government in less than three years, reversed its predecessor’s policy of starving Ukraine’s cultural and artistic spheres, doubling government funding.

An additional $200 million was earmarked for Ukraine’s hemorrhaging scientific institutions.

The government also increased revenue by $1.7 billon more than the Yanukovych government planned for the 2008 budget, largely due to the 2007 inflation estimate being revised from 14.5 to 16 percent.

Pensions, salaries and higher education stipends were all boosted, and the Tymoshenko Bloc even adopted a Yanukovych-government campaign promise to pay $10,000 to parents of a third newborn child ($2,455 for the first child, $5,000 for the second).

However, the budget projected 2008 inflation to remain at 16 percent, a rate considered unacceptably high for European countries.

The Tymoshenko Bloc’s 2007 parliamentary campaign was known for its ambitious campaign promises among other things, labeled by opponents as populist.

Indeed some were unrealistic, such as returning $120 billion in bank deposits lost during the 1991-1995 hyperinflation as well as ending mandatory military service by January.

However the government did earmark $4 billion for those Ukrainians seeking to regain their lost bank deposits, or $200 per person, six times more than had been aside during all the budgets of Ukrainian independence combined, Tymoshenko said.

“I was told thousands of times that executing this program is absolutely impossible,” Tymoshenko said in a nationally-televised address.

“They said this process of returning savings has to be extended over 50 years and reduce the sum payment by five times. This isn’t our approach and I assure you today that this program is possible to execute, and we’ll execute it,” she added.

In fact on Jan. 8, Oschadbank, the Ukrainian successor to the Soviet state savings bank, announced it has launched a telephone hotline for those wanting to receive their share.

Coalition leaders acknowledged the budget wasn’t perfect, the opposition had its own gripes, and Parliamentary Speaker Arseniy Yatsenyuk, an ally of President Viktor Yushchenko, vowed a revised budget would be approved in March.


Energizing reforms planned

Ukraine’s energy woes typically surface around New Year’s Day, and this time around the center of turmoil was Naftogaz, Ukraine’s state-owned natural gas and oil company.

Tymoshenko declared on Jan. 2 the Yanukovych government left Naftogaz, once the country’s largest and most profitable company, on the verge of bankruptcy. Losses doubled gains in 2007 and without an approved natural gas budget for 2008, she added.

Tymoshenko accused the Yanukovych of intentionally driving Naftogaz towards bankruptcy with the intention of playing into Kremlin energy interests by allowing the Ukrainian government to lose control of its strategic energy sector. Naftogaz, which controls Ukraine’s vast gas and oil pipeline network, is also the leading gas and oil producer and supplier through subsidiaries.

The company is viewed as having a major role in defending national energy interests and balancing out Russian groups on the market.

Tymoshenko pledged to restore the company to financial health with its new director at the helm, Oleh Dubyna, as well as an investigation committee.

“I was completely shocked by the information given by the new director of Naftogaz,” Tymoshenko said, adding that Ukraine’s vast “gas storage tanks have practically no resources. What is stored belongs to dubious commercial structures.”

Ukraine’s underground gas storage facilities play a key role in supplying gas on the domestic market and to European consumers during peak winter periods.

Ever since it emerged in 2004, Swiss-registered natural gas intermediary RosUkrEnergo, whose role has been dubbed as corrupt by Tymoshenko in sucking billions out of the Ukraine-Russia and Central Asian gas trade, has been Tymoshenko’s favorite punching bag.

RosUkrEnergo is the most corrupt business structure created in the post-Soviet sphere during the last decade, Tymoshenko told the Dec. 27 live program.

US officials have backed Tymoshenko’s concern over the alleged murky role of RosUkrEnergo, half owned by Russian gas giant Gazprom with the rest belonging to camera shy Ukrainian businessmen.

“This is a super metastasis that needs to be removed,” she said.

“They knew that when I arrive, I will do a lot to quickly eliminate this disease. And literally several weeks before our new government was voted in, they signed all agreements through RosUkrEnergo to supply gas with boosted prices,” she added.

The prime minister said she will examine ways to eliminate RosUkrEnergo without destabilizing the Ukrainian economy or shaking up sensitive energy relations with Moscow, the main supplier of blue fuel to Ukraine.

“I’ve already sent (Ukrainian RosUkrEnergo co-owner Dmytro) Firtash a basket of sleeping pills because he isn’t sleeping. I can tell you that with surety,” Tymoshenko declared, referring to one of the company’s known partners who has become a billionaire as a result. Firtash owns a 45 percent interest in RosUkrEnergo. His partner, Ivan Fursin, a close friend of former Yanukovych chief of staff Serhiy Levochkin, owns a 5 percent stake.

“I think he won’t be sleeping calmly because RosUkrEnergo won’t be operating on the Ukrainian market with its affiliate enterprises. Ukraine will have direct contact with Russia without intermediaries, and possibly other nations supplying gas,” she added.